You want a tiny home but, how do you get financing for it? Great question! Here are some options for you to decide which direction works best for you.
Do you have equity in your current home?
Let’s use that equity to build your new tiny home ADU and increase the value of your overall property.
Here’s how it works: You would apply for a HELOC (Home Equity Line Of Credit) this allows you to take the equity that you have in your home and use it like a credit card. Let’s say that you pulled $160,000 equity from your home to fund the entire new build, the bank would give you that $160,000 on a line of credit and your payments on that money would only be due based on the amount of money you have charged toward the available balance. So, you aren’t making full payments on that $160,000 until you have spent that entire amount. If you have only spent $50,000 of the line of credit, your payments will reflect that amount. You can charge that line of credit and pay it off, as much as you’d like, just like you would a credit card.
If this seems like a good direction for you to fund your new tiny home ADU, just click HERE and complete the application and we will begin the process for approval. The finance agent will be in touch with you to discuss the HELOC and how it works in detail. If you are unsure of what type of equity you have in your home, simply contact Big Dogg via our CONTACT page and we will conduct a CMA on your property, free of charge, and help determine the potential equity you may have, to determine if a HELOC is the best option for you.
No Equity in your current home or not enough?
Lets look at doing a ‘Cash-out Refinance” on your current home loan.
The way this works is, the lender would pay off your current home and add on the additional money needed to fund your new tiny home ADU. The lender determines what is called an ARV (After Repair Value) of your home. They determine what the entire property would be appraised at once the ADU has been completed. That new property value determines the value and how much new equity would be able to be used toward building your new ADU.
For Example: If your current home is worth $400,000 but, by adding the tiny home ADU, the new value is $600,000, they would refinance the entire property and lend on a percentage of that new value of $600,000.
If this seems to be an option you would like to learn more information about, just click HERE and connect with our Rocket Mortgage lending agent to discuss this process in detail.
Maybe you’d just like to get a personal loan to help fund your new tiny home ADU?
No problem, that’s an easy and fast process. You can have up to $100,000 available within a week. Simply click HERE and complete the application and a LightStream lending agent will be in contact to determine your approval status and complete the loan process with you.